The Conference Board Leading Economic Index®(LEI) for Korea declined 0.4 percent and The Conference Board Coincident Economic Index®(CEI) for Korea increased 0.1 percent in June.

The Conference Board LEI for Korea fell in June following an increase in May. A gain from private construction orders was offset by negative contributions from the (inverted) index of inventories to shipments, exports and machinery orders. With the decline in June, the six-month change in the leading economic index continued to slow — to 1.7 percent (about a 3.4 percent annual rate) in the first half of this year, down from 3.0 percent (about a 6.1 percent annual rate) for the previous six months. However, the strengths among the leading indicators remained widespread in the last six months.

The Conference Board CEI for Korea, a measure of current economic activity, increased slightly in June. Total employment advanced this month, while industrial production fell. The coincident economic index increased by 1.7 percent (about a 3.4 percent annual rate) in the six-month period through June 2011, up from the 0.9 percent rate (about a 1.8 percent annual rate) for the previous six months. At the same time, real GDP grew at a 3.4 percent annual rate in the second quarter of 2011, down from the 5.4 percent annual rate in the first quarter of the year.

The Conference Board LEI for Korea has been fluctuating around a slightly rising trend since the beginning of this year, but its six-month growth rate has moderated from the second half of last year. Meanwhile, The Conference Board CEI for Korea continued to increase in June, and its six-month growth rate has remained fairly steady so far. The current behavior of the composite indexes and their components suggest that, despite short-term volatility, economic expansion should continue in the coming months.

LEADING INDICATORS

Two of the seven components that make up The Conference Board LEI for Korea increased in June. The positive contributors were private construction orders and the (inverted) yield of government public bonds. Negative contributors – from the largest negative contributor to the smallest – were the (inverted) index of inventories to shipments, value of machinery orders, real exports FOB, stock prices, and letter of credit arrivals.

With the 0.4 percent decrease in June, The Conference Board LEI for Korea now stands at 122.2 (2004=100). Based on revised data, this index increased 0.5 percent in May and declined 0.3 percent in April. During the six-month span through June, the leading economic index increased 1.7 percent, with six of the seven components advancing (diffusion index, six-month span equals 85.7 percent).

COINCIDENT INDICATORS

Three of the four components that make up The Conference Board CEI for Korea increased in June. The positive contributors– in order from the largest positive contributor to the smallest – were total employment, the wholesale and retail sales component, and monthly cash earnings*. Industrial production declined in June.

With the 0.1 percent increase in June, The Conference Board CEI for Korea now stands at 115.7 (2004=100). Based on revised data, this index increased 0.3 percent in May and decreased 0.3 percent in April. During the six-month span through June, the coincident economic index increased 1.7 percent, with three of the four components advancing (diffusion index, six-month span equals 75.0 percent).